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City of San Leandro <br />Meeting Date: September 4, 2018 <br />Staff Report <br />Agenda Section:File Number:18-390 CONSENT CALENDAR <br />Agenda Number:8.O. <br />TO:City Council <br />FROM:Jeff Kay <br />City Manager <br />BY:Tom Liao <br />Community Development Director <br />FINANCE REVIEW:David Baum <br />Finance Director <br />TITLE:Adoption of a City of San Leandro City Council Resolution to Substitute <br />Collateral for the Section 108 Guaranteed Loan from the United States <br />Department of Housing and Urban Development (HUD) for the Construction of <br />the San Leandro Senior Community Center by Designating as Collateral <br />$190,635.20 in the City’s General Fund Reserves <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends adoption of a resolution to substitute collateral for the Section 108 guaranteed <br />loan from the United States Department of Housing and Urban Development (“HUD”) for the <br />construction of the San Leandro Senior Community Center by designating as collateral <br />$190,635.20 in the City’s General Fund Reserve. In 2009, the City Council authorized the City <br />Manager to submit an application to HUD for a Section 108 loan to finance construction of the <br />San Leandro Senior Center. The 20-year Section 108 loan was awarded to the City of San <br />Leandro in 2010 in the amount of $2,500,000 (the “Section 108 Loan”). Annual loan repayments <br />began in 2011 and are paid out of the City’s annual HUD Community Development Block Grant <br />(CDBG) allocation. <br />BACKGROUND <br />In 2009, the City Council approved City Council Resolution No. 2009-054, and authorized the City <br />Manager to submit an application to HUD for a Section 108 loan to finance construction of the <br />San Leandro Senior Center. The 20-year loan was awarded to the City of San Leandro in 2010 <br />for $2,500,000 with annual loan repayments beginning in 2011 and paid out of the City’s annual <br />Federal HUD Community Development Block Grant (CDBG) allocation. The Section 108 Loan is <br />regulated by the Housing and Community Development Act of 1974, as Amended, 42 U.S.C. § <br />5308. <br />In late 2017, HUD informed City staff that the Section 108 Loan was part of an ongoing <br />nation-wide review by HUD’s Financial Management Division. Documents required as a part of <br />Page 1 City of San Leandro Printed on 8/28/2018 <br />184